Modoc County Expects to Avoid Bankruptcy, Revive Local Hospital

A rural California county has asked the state for a loan to infuse funds into a failing hospital and relieve debt. On Tuesday, a vote passed to impose a $195 yearly parcel tax on Modoc County in order to avoid bankruptcy. The money is expected to go toward existing hospital operation costs, which originally overwhelmed the county, and creating a new hospital district.

The Associated Press reports that local officials claimed they needed to request a $12.5 million loan to take off some of the pressure of Modoc County's growing debt. Although bankruptcy was tossed around as an option, financial experts said it should be considered the last resort. According to the AP, state officials are still considering the loan request, but the county will most likely avoid having to file for bankruptcy.

Bankruptcy is considered an option for organizations that can no longer handle their debt. By filing for bankruptcy, the existing debt may be wiped out. The party at hand is expected to repay the bail out loan over time once they have regained financial stability.

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